property, except through the trustee, he may bring suit upon the coupons and recover judgment thereon; as to other property not conveyed to the trustee the bondholder may treat himself as an individual creditor and proceed to recover judgment for the amount of his unpaid coupons, execution upon the judgment, however, cannot be directed against any property covered or embraced in the mortgage to the trustee.

To a suit on coupons, the affidavit of defence alleged that the bonds with interest coupons and the mortgage by which payment of them was secured was made and executed in New Jersey and related to property in New Jersey, and that the law governing defendant's liability should be that of New Jersey.

It was held in an action on such coupons brought in a Pennsylvania court that notwithstanding the fact that the coupons were payable in New York, the law of New Jersey requiring a foreclosure sale of the mortgaged premises would be applied. It is the law of New Jersey that a mortgage must first be foreclosed before suit can be brought on the bond for the deficiency; and this law applies to overdue interest coupons. The construction of this law of New Jersey has been adopted in Pennsylvania (Sea Grove B. & L. Ass'n v. Stockton, 148 Pa. 146) as to a mortgage debt, when relief on a New Jersey contract was sought in a Pennsylvania court, and the same principle is applicable to the coupons.7

The statute of limitations cannot be set up to prevent a recovery upon coupons which have not been detached from bonds.8

Foreclosure of Mortgage.

12. A mortgage executed as security for the faithful compliance with the terms of a lease by a street railway company to an electric light company, the lessee covenanting to keep the leased property in good repair and restore the same in good condition at the expiration of the lease, to supply the lessor

6 Ritter v. Conshohocken Ry., 18 Montg. 61 (1902); 11 Dist. 703 (1902.) 7 Newman v. Brigantine Beach R. R., 15 Pa. C. C. R., 625 (1894); 3 Dist. 833 (1894.)

8 Philadelphia Trust Co. v. Philadelphia & Erie R. R., 160 Pa. 590 (1894.)

with power to run its cars, to pay net receipts to the lessor to be applied to payments of coupons on lessor's bonds, to pay taxes, etc., may be foreclosed where the lessee defaulted in its covenants by failure to rebuild the power house after being destroyed by fire; to pay expenses, taxes, etc., which the lessor paid; and by applying certain of the net receipts to betterments and improvements.9

Where a person leases rolling stock to a railroad company for a certain term at an annual rental with an option to purchase at a stipulated price at any time during the term, payments of rent to be credited on account of the purchase money, the contract is a bailment and a sale under the foreclosure of a mortgage prior in date to the lease, will not pass title to such rolling stock. 10

If the purchaser of the property of a railroad company sold under foreclosure proceedings has had possession for eight years of a locomotive claimed as a part of the property sold, the statute of limitations will protect such possession against a person claiming that the locomotive had been merely leased to the mortgagor, and was not covered by the mortgage under which the foreclosure proceedings were instituted.11

Where the stockholders and bondholders of a railroad company, with the assent of the company, adopt a plan of reorganization by which certain income mortgage bonds provided for in outstanding scrip certificates are converted into preferred stock, and it appears that no time is mentioned in the certificates within which they are to be presented for conversion into bonds, the railroad company cannot set up as a defence in an action against it on a certificate, the plan of reorganization, nor the delay of the plaintiff in not presenting his certificate until after the income bonds had been retired.12

Where certain persons acting as a committee to reorganize a railroad company are given authority to "limit the time of

9 Gettysburg Electric Ry. v. Electric Light, Heat & Power Co., 200 Pa. 372 (1901.)

10 Collins v. Bellefonte Cent. R. R., 171 Pa. 243 (1895.)

II Altoona & Beech Creek R. R. v. Pittsburg, Johnstown, Ebensburg & Eastern R. R., 203 Pa. 102 (1902.)

12 Lennig v. Choctaw, Oklahoma & Gulf R. R., 15 Super. Ct. 510 (1901.)

acceptance," and "extend the time in their discretion," to "supply defects in said plan necessary to carry it out properly and effectively," and "to delegate any necessary authority as well as discretion" and by virtue of this authority delegated to the chairman of the committee the discretion to extend the time for acceptance, the chairman in the absence of any requirement that the extension of time shall be in writing may make an oral extension of the time to a stockholder, and such a stockholder has the right, even after the expiration of the time limited in the agreement to join in the reorganization plan.13

The Acts of May 5, 1876, and March 23, 1877, which give equity jurisdiction to foreclose mortgages of railroad companies applies to street railway companies.14

13 Raleigh v. Earle, 185 Pa. 78 (1898), affirming 18 Pa. C. C. R. 99 (1896); 5 Dist. 111 (1896.)

14 Old Colony Trust Co. v. Allentown and Bethlehem Rapid Transit Co., 192 Pa. 596 (1899.)

13. Registration.

CHAPTER III.

STATUS OF FOREIGN CORPORATIONS.

14. Holding Stock of Domestic Corporation.

Registration.

13. Registration by a foreign corporation after the work is completed and before suit will not confer a right of action. Full performance of the contract by the foreign corporation is not sufficient to prevent recovery from a defendant, who retains the price or value of it, when the suit is directly upon the contract. The rule that one may recover upon a forbidden contract if he can prove his case without giving it in evidence does not apply to illegal contracts prohibited by statute on the ground of public policy, nor does the law of estoppel apply to contracts of foreign corporations doing business contrary to the Act of April 22, 1874.1

The purpose of the Act of April 22, 1874, P. L. 108, relating to registration, is to bring foreign corporations doing business in this State within the reach of legal process. Such purpose is not accomplished by a registration of the corporation at the pleasure of its officers, or when it may be to their interest to appeal to our courts. Nothing short of a registration before the contract that it seeks to enforce is made can give a foreign corporation a right of action. Thus, where a foreign corporation enters into this State and engages in the work of constructing an electric railway during a period of six months, and in the prosecution of this business employs a great many men and nearly all of its capital and does not file a statement in the office of the Secretary of the Commonwealth as required by the Act of 1874 until two months after the work was

I Delaware River Quarry & Construction Co. v. Bethlehem & Nazareth Str. Ry., 7 North. 337 (1901.)

completed although before suit was brought, it cannot maintain an action for labor and materials furnished by it during the progress of the work.2

In Shepp v. Schuylkill Valley Traction Co.3 it was held that the purchase of stock of a Pennsylvania corporation and the voting of it for directors by a foreign corporation is not "doing business" in this Commonwealth within the meaning of the Act of April 22, 1874, which requires a statement to be filed with the Secretary of the Commonwealth. The purchase of stock of the Pennsylvania corporation was authorized by its charter, and is not forbidden by the laws of this State. The rights and powers of the foreign corporation are those of a stockholder only. It is not the corporation in the sense of that term as applied to the management of the corporate business or the control of the corporate property.

Merely making a written executory agreement by a foreign corporation for the future construction of a street railway in the State is not "doing business" in the sense contemplated by the Act of April 22, 1874. When the contract is made between two foreign corporations the mechanical act of affixing the respective seals will not be presumed to have taken place here.1

Holding Stock of Domestic Corporation.

14. A foreign corporation may acquire the majority of stock of a domestic street railway company; if the corporation is acting ultra vires, no one except the State of its creation or the Commonwealth of this State can raise the question.5

2 Delaware River Quarry & Construction Co. v. Bethlehem & Nazareth Pass. Ry. Co., 204 Pa. 22 (1902.)

3 Shepp v. Schuylkill Valley Traction Co., 17 Montg. 52 (1901.)

4 Delaware River Quarry & Construction Co. v. Bethlehem & Nazareth Str. Ry. Co., 7 North. 193 (1900.)

5 White v. Ryan, 15 Pa. C. C. R. 170 (1894.)